Dollar Slides as Trump Softens China Tariff Stance: Markets Wrap

(Bloomberg) — The dollar dropped to a one-month low after President Donald Trump appeared to soften his approach toward tariffs on China. Stock futures fluctuated after the S&P 500 scaled a fresh peak. 

The president said in an interview with Fox News that he would “rather not” use tariffs against the world’s second-largest economy. He has also, so far, held back from imposing tariffs on Europe, though he warned of levies against Canada and Mexico. 

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The dollar index dipped 0.4% on Friday and was on track for its biggest weekly decline in 14 months. Asian and European stocks rallied. Gold rose to near a record high, trading around $2,781 an ounce.  

“It is early days but nothing that President Donald Trump has said or done has caused a bad reaction in financial markets,” said Chris Iggo, chief investment officer of core investments at AXA Investment Managers. “Quite the contrary. It is paying to stay invested.”

Elsewhere, the yen strengthened against the greenback. The Bank of Japan raised interest rates for the first time since July and Governor Kazuo Ueda left options open for the timing of the next hike. 

Corporate Highlights

• Boeing shares fell in pre-market trading after announcing another quarter of charges and losses
• Texas Instruments slide 5% on a disappointing earnings forecast
• Burberry Group jumped after reporting better-than-expected sales
• Novo Nordisk rose after an experimental shot delivered as much as 22% weight loss in an early-stage trial, boosting investors’ hopes for the drugmaker’s pipeline
• Twilio Inc. surged after giving a forecast that revenue growth will top the average analyst estimate
• American Express Co. profits increased 12% as well-heeled consumers spent more than analysts expected over the holidays

Markets have broadly done well this week, helped by expectations that Trump’s policies will boost US corporate profits. In terms of equity flows, US stock funds got $7 billion of inflows in the week through Wednesday, according to a note from Bank of America Corp. strategists. 

In Europe, the recent rally has been so strong that strategists see little room for more upside. The Stoxx Europe 600 Index — which gained 4.5% year-to-date — will end 2025 at 534 points, according to a Bloomberg survey of strategists. That’s just 1% above Wednesday’s close.

Key events this week:

• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.1% as of 8:27 a.m. New York time
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average fell 0.2%
• The Stoxx Europe 600 rose 0.4%
• The MSCI World Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.5% to $1.0469
• The British pound rose 0.5% to $1.2409
• The Japanese yen fell 0.2% to 156.37 per dollar

Cryptocurrencies

• Bitcoin rose 2% to $105,184.51
• Ether rose 4.7% to $3,400.45

Bonds

• The yield on 10-year Treasuries was little changed at 4.64%
• Germany’s 10-year yield advanced three basis points to 2.58%
• Britain’s 10-year yield advanced two basis points to 4.65%

Commodities

• West Texas Intermediate crude rose 0.6% to $75.04 a barrel
• Spot gold rose 1% to $2,781.97 an ounce

This story was produced with the assistance of Bloomberg Automation. 

–With assistance from Subrat Patnaik and Sujata Rao.

©2025 Bloomberg L.P.